A country has a comparative advantage in a good if:
A) it can produce more of that good than any other country.
B) it does not have an absolute advantage in that good.
C) it has the lowest opportunity cost of producing that good.
D) no other country is willing to buy that good from it.

Question

Quizplus · Accepted Answer

Comparative advantage means that a country can produce a good at a lower opportunity cost (the cost of producing one good in terms of the potential production of another good) than another country. Therefore, option C is the correct answer. Options A and D do not necessarily indicate comparative advantage and option B implies that a country cannot have an absolute advantage and a comparative advantage in the same good, which is not true.

A Country Has a Comparative Advantage in a Good If